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8-K - FORM 8-K - Avantair, Incd450285d8k.htm
EX-10.1 - NOTE AND WARRANT PURCHASE AGREEMENT - Avantair, Incd450285dex101.htm
EX-10.2 - FORM OF SENIOR SECURED CONVERTIBLE PROMISSORY NOTE - Avantair, Incd450285dex102.htm
EX-10.6 - AMENDMENT NO. 1 TO RESTRICTED STOCK AGREEMENT - Avantair, Incd450285dex106.htm
EX-10.9 - AMENDED AND RESTATED RESTRICTED STOCK AGREEMENT - Avantair, Incd450285dex109.htm
EX-99.2 - PRESS RELEASE - Avantair, Incd450285dex992.htm
EX-10.3 - FORM OF WARRANT - Avantair, Incd450285dex103.htm
EX-10.8 - AMENDMENT NO. 1 TO AMENDED AND RESTATED WARRENT - Avantair, Incd450285dex108.htm
EX-10.4 - SECURITY AGREEMENT - Avantair, Incd450285dex104.htm
EX-10.5 - REGISTRATION RIGHTS AGREEMENT - Avantair, Incd450285dex105.htm
EX-10.7 - WARRANT ISSUED BY THE COMPANY - Avantair, Incd450285dex107.htm
EX-10.10 - WARRANT ISSUED BY THE COMPANY - Avantair, Incd450285dex1010.htm
EX-10.11 - WARRANT ISSUED BY THE COMPANY - Avantair, Incd450285dex1011.htm
EX-10.12 - AMENDMENT NO. 1 TO THE N180HM AIRCRAFT LEASE AGREEMENT - Avantair, Incd450285dex1012.htm
Avantair, Inc.
Investor
Presentation
December 6, 2012
Exhibit  99.1


SAFE HARBOR
2
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended,
and
Section
21E
of
the
Securities
Exchange
Act
of
1934,
as
amended.
All
statements,
other
than
statements
of
historical fact, including, without limitation, statements regarding the Company’s expectations, beliefs, intentions or future
strategies
that
are
signified
by
the
words
“expects,”
“anticipates,”
“intends,”
“believes,”
or
similar
language.
Our
actual
results
could differ materially from the information contained in these forward-looking statements as a result of various factors, including,
but
not
limited
to,
the
factors
outlined
in
our
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
June
30,
2012,
and
the
factors
outlined in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2012, in each case, particularly
under
the
heading
“Risk
Factors.”
Additional
risks
and
uncertainties
not
currently
known
to
us
or
that
we
currently
deem
to
be
immaterial may also materially adversely affect our business, financial condition or operating results. We do not undertake, and
expressly
disclaim,
any
obligation
to
update
this
forward-looking
information,
except
as
required
by
applicable
law.
Important
factors
that
could
cause
actual
results
to
differ
materially
from
Avantair’s
expectations
as
described
in
Avantair’s
public
filings
with the Securities and Exchange Commission ("SEC") include, without limitation: (1) our inability to fund our operations and
capital
expenditures;
(2)
our
inability
to
raise
capital
or
meet
cash
flow
projections,
including
our
inability
to
raise
funds
through
the issuance of convertible notes and warrants or through other financings; (3) our inability to resume the operation of our fleet on
the timeline which we expect; (4) extensive government regulation, including, but not limited to, the operational requirements of
the FAA; (5) our inability to generate sufficient cash flows to meet our debt service obligations or other financial obligations; (6)
our
inability
to
obtain
new
or
retain
current
acceptable
program
participant
contracts;
(7)
the
loss
of
key
personnel;
(8)
our
inability
to
effectively
manage
our
growth;
(9)
our
inability
to
acquire
additional
aircraft
and
parts
from
our
single
manufacturer;
(10)
competitive
conditions
in
the
fractional
aircraft
industry;
(11)
the
failure
or
disruption
of
our
computer,
communications
or
other technology systems; (12) changing economic conditions; (13) increases in fuel and other costs; and (14) our failure to
attract and retain qualified pilots and other operations personnel.
The forward-looking statements relating to future events and the future performance of the Company in this document include,
without limitation, statements regarding: the Company's new business model, as described herein, the Company's cash forecast
assumptions described herein, and the Company's quarterly cash flow projections set forth herein, including each component
provided
in
such
projections.
Other
forward-looking
statements
are
described
in
our
public
filings
with
the
SEC.


NEW BUSINESS MODEL
3
Primary operating strategy is to achieve positive cash flow through continued sale of
Fractional Shares, Axis Leases, Edge Cards, and continued implementation of cost
savings initiatives
Intensely tracking performance and results to achieve operating strategy
New Finance Leadership Team has been put in place
Continue to promote a culture where safety and customer service remain as the
Company’s primary objectives
To achieve strategic goals of positive earnings and cash flows, implementing a series of
cost
savings
initiatives
having
no
impact
to
safety
and
customer
service.
Initiatives
have
been expanded in November 2012 to include:
Reduce fleet size by 12 aircraft by strategically eliminating more costly aircraft from
our fleet which the Company believes will reduce both fixed and variable costs
Increasing the overall reliability of our fleet
Driving increased efficiencies through outsourced maintenance and lowering our
overall costs of flight operations
Continuing
forward
on
broader
series
of
cost
savings
initiatives
previously
announced


PROJECTIONS
4
The Company makes no express or implied representation or warranty as to the attainability of the projected
financial information contained herein (the "Projections") or as to the accuracy or completeness of the
assumptions from which such projected information is derived.  Under no circumstances should such
information be construed as a representation or prediction that the Company will achieve or is likely to
achieve any particular results. The projected financial information is management’s projection of possible
future results, is dependent upon many factors over which the Company has no control and is necessarily
based on a number of assumptions as to future events that are inherently uncertain and subjective, and the
Company's actual results may vary materially. The Projections and the related assumptions (whether or not
described herein), as well as all of the elements taken into consideration to determine the Projections, may
not occur, and they are subject to change or modification due to the uncertainty associated with the
economic, financial and competitive environment in which the Company operates and to the risks and
uncertainties to which the Company and its business is subject, all of which may have an impact on the
Company's business activities, financial position, results of operations, and outlook, and on the realization of
the assumptions and Projections described above. The projections were not prepared in compliance with
the guidelines of the American Institute of Certified Public Accountants and have not been examined,
reviewed or compiled by the Company's independent certified public accountants or any other third party.   
The Company does not intend to update or otherwise revise the projections to reflect circumstances existing
after the date hereof or to reflect the occurrence of unanticipated events, even in the event that any or all of
the underlying assumptions are shown to be in error. Furthermore, the Company does not intend to update
or revise the projections to reflect changes in general economic or industry conditions.


PROJECTIONS (cont’d)
5
The Projections are made as of November 20, 2012 and are based on a number of assumptions, including,
but not limited to those set forth on the pages that follow. The
Projections also assume the success of the
Company’s current business strategy as well as the Company's ability to raise additional funds within
certain
time
frames
and
on
certain
terms.
The
success
of
the
strategy
and
the
ability
to
raise
such
funds
on
acceptable terms is subject to uncertainties and contingencies beyond the Company’s control, and no
assurances can be given that (A) the strategy will be effective or the anticipated benefits from the strategy
will be realized in the periods for which the Projections have been prepared, and (B) that any funds will be
raised
on
acceptable
terms
and
timeframes.
The
assumptions
described
herein
are
those
that
the
Company
believes
are
significant
to
the
Projections.
However,
not
all
assumptions
used
in
the
preparation
of
the
Projections have been set forth herein.
The Projections do not assume the occurrence of any periods of economic slowdown that might adversely
affect
demand
for
the
Company’s
products
and
services.
The
Projections
assume,
among
other
things,
that:
(i) there will be no material costs resulting from legal proceedings; (ii) there will be no material change
in the political, fiscal or economic conditions; (iii) there will be no material change in legislation or
regulations or the administration thereof that will have an unexpected effect on the business of the
Company; and (iv) there will be no labor or industrial disputes or other disturbances that would materially
affect
the
operations
or
sales
of
the
Company.
Other
important
factors
that
could
cause
actual
results
to
differ materially from Avantair’s expectations are set forth above under the caption "Safe Harbor" and in our
public
filings
with
the
SEC
under
the
caption
“Risk
Factors”
and
elsewhere.


Operational:
Company plan of at least 41 aircraft operational by November 21
st
Plan to reduce fleet by 12 aircraft (grounded and sold) in upcoming months. Criteria based on a ranking   
system
tracking
aircraft
cost/hour,
performance,
reliability
and
others.
Removed
aircraft
as
follows:
-
4 Aircraft -
owners on expired contracts no longer subject to Monthly Management Fees (MMF)
-
3 Aircraft -
owners with to near-term MMF contract expiration
-
3 Aircraft -
core aircraft financed by the Company
-
2 additional Aircraft
Receipts:
Built in what management believes as of November 20
th
to be a reasonable timeline for cash collections
due to operational stand down based on:
-
Monthly Management Fees (MMF), 
-
Annual Prepayments of MMF, and
-
Flight Fees
Forecasted cash receipts reflecting expiring MMF contracts
Forecasted
cash
from
lease
and
card
sales
at
reduced
levels
in
Nov
’12
Feb
’13 
Disbursements:
Payroll, maintenance, fuel and other related flight operation disbursements have been reduced based on  
12 fewer aircraft in the fleet
Built in timeline to achieve normalized AP levels
Other disbursements related to the operational stand down flow in November and December
Financing:
Includes the Company’s receipt of $8 million in three tranches of $3 million, $2 million and $3 million during
November, December and January, respectively
6
CASH
FORECAST
ASSUMPTIONS


7
QUARTERLY CASH FLOW PROJECTION
(in millions)
Q1
Actual
Sales receipts
10.4
$    
7.7
$          
9.0
$        
10.5
$        
37.6
$     
A/R and other receipts
30.6
$    
25.3
$       
28.2
$     
35.7
$        
119.8
$   
Total receipts
41.0
$    
33.1
$       
37.2
$     
46.2
$       
157.4
$   
Payroll
(8.9)
$     
(7.7)
$        
(5.3)
$      
(5.9)
$         
(27.9)
$    
Maintenance
(9.3)
$     
(6.5)
$        
(8.1)
$      
(8.5)
$         
(32.4)
$    
Operations
(15.8)
$   
(12.2)
$      
(13.7)
$    
(13.5)
$      
(55.2)
$    
General and admin
(4.0)
$     
(4.3)
$        
(3.6)
$      
(3.0)
$         
(15.0)
$    
lease/debt service
(3.6)
$     
(2.4)
$        
(2.4)
$      
(2.1)
$         
(10.5)
$    
Other
(3.3)
$     
(3.6)
$        
(3.1)
$      
(3.7)
$         
(13.7)
$    
Total disbursements
(44.9)
$  
(36.6)
$     
(36.1)
$   
(36.8)
$      
(154.5)
Net Cash Flow
(4.0)
$    
(3.6)
$        
1.1
$       
9.3
$         
2.8
$       
Financing
-
$      
5.0
$         
3.0
$       
-
$         
8.0
$       
Adj. Net Cash Flow
(4.0)
$    
1.4
$         
4.1
$       
9.3
$         
10.8
$     
-
Projections are subject to change and are based on assumptions in the previous slide.  Actual results
may materially differ from these projections
-
Q4 FY13 projections include estimated $5M of receipts for annual prepayment of MMF, consistent
with May 2012
FY 2013
Q2
Q3
Q4
Full Year
Projection
Projection
Projection
Projection


8
Q1
Q2
Q3
Q4
Full Year
Q4 FY12
Variance
in millions
Actual
Projection
Actuals
to Q4 FY13
Sales receipts
10.4
$             
7.7
$               
9.0
$               
10.5
$             
37.6
$         
10.4
$         
0.1
$            
A/R and other receipts
31.1
$             
29.4
$             
29.6
$             
29.7
$             
119.8
$       
27.5
$         
2.2
$            
Total receipts
41.5
$            
37.1
$            
38.6
$            
40.2
$            
157.4
$      
37.9
$         
2.3
$           
Payroll
(8.9)
$              
(7.7)
$              
(5.3)
$              
(5.9)
$              
(27.9)
$        
(9.0)
$          
3.1
$            
Maintenance
(9.3)
$              
(6.5)
$              
(8.1)
$              
(8.5)
$              
(32.4)
$        
(9.5)
$          
1.0
$            
Operations
(15.8)
$            
(12.2)
$            
(13.7)
$            
(13.5)
$            
(55.2)
$        
(14.9)
$        
1.4
$            
General and admin
(4.0)
$              
(4.3)
$              
(3.6)
$              
(3.0)
$              
(15.0)
$        
(4.2)
$          
1.2
$            
lease/debt service
(3.6)
$              
(2.4)
$              
(2.4)
$              
(2.1)
$              
(10.5)
$        
(3.0)
$          
0.9
$            
Other
(3.3)
$              
(3.6)
$              
(3.1)
$              
(3.7)
$              
(13.7)
$        
(5.4)
$          
1.7
$            
Total disbursements
(44.9)
$           
(36.6)
$           
(36.1)
$           
(36.8)
$           
(154.5)
$     
(46.0)
$       
9.2
$           
Net Cash Flow
(3.5)
$             
0.5
$               
2.4
$               
3.4
$               
2.8
$           
(8.1)
$         
11.5
$         
Financing
-
$              
5.0
$               
3.0
$               
-
$              
8.0
$           
-
$           
-
$           
Adj. Net Cash Flow
(3.5)
$             
5.5
$               
5.4
$               
3.4
$               
10.8
$         
(8.1)
$         
11.5
$         
- Projections are subject to change and are based on assumptions in a previous slide.  Actual results may materially differ from these projections.
- Annual prepayment of MMF has been allocated evenly to each month during the year to show more even quarterly cash flows.  Actual
cash projections will differ as annual prepayment dates are weighted towards the fourth quarter of the fiscal year.
- The projected improvement in net cash flow in the comparison between Q4 FY13 and Q4 FY12 reflect expected changes to the business model and as outlined
in the assumptions slide.
FY 2013
Projection
QUARTERLY
CASH
FLOW
PROJECTION
(NORMALIZED
PREPAID
MMF)


VALUE PROPOSITION
AIRCRAFT
Economical and high performance Piaggio Avanti P180
Currently
57
aircraft
in
fleet
North
American
exclusivity
of
Piaggio
P180
aircraft
Largest and quietest cabin in its category
Low
operating
costs
innovative
aerodynamic
design
&
most
fuel
efficient
in
its
class
Fastest
twin
turboprop
ever
built
light
jet
speed
COMPETITIVE PRICING
Award winning programs (Fractional Shares, Axis Leases, Edge Cards)
Simplified pricing, no fuel surcharge or hourly operating costs
40% less than competitive programs
PEOPLE & SERVICE
Approximately 500 employees including over                     
200 pilots
State-of-the-art, 24/7 operations center in
Clearwater, FL
Entire
organization
committed
to
one
aircraft
type
and industry leading customer service
9


FINANCIAL SUMMARY
Revenue generating flight hours
11,343 hours in FY13 Q1 versus 11,366 hours in FY12 Q1
Strong revenue growth through challenging economic environment
11% CAGR from FY08 -
FY12
Improved bottom line performance
($1.0) million net loss in Q1 FY13 versus ($2.2) million net loss in Q1
FY12
Significant improvement in Adjusted EBITDA
$2.2 million in Q1 FY13 versus ($0.5) million during prior year period
November 13, 2012 balance sheet
Approximately $3 million in cash, and
$70 million of deferred revenue
10


NON-GAAP MEASURE
OF PERFORMANCE
The following table (in thousands) reflects the reconciliation of net loss, prepared in
conformity with GAAP to the non-GAAP financial measure of Adjusted EBITDA:
The
Company
believes
that
the
non-GAAP
financial
measure
of
Adjusted
EBITDA
is
useful
to
investors
as
it
excludes
the
gain
on extinguishment of debt and other income and expense items that do not directly reflect the underlying performance of the
Company’s business operations. This measure is a supplement to accounting principles generally accepted in the U.S. used to
prepare the Company’s financial statements and should not be viewed as a substitute for GAAP measures. In addition, the
Company’s non-GAAP measure may not be comparable to non-GAAP measures of other companies.
11
2012
2011
Net Loss
(970)
$                 
(2,180)
$              
Add:
Depreciation and amortization
1,451
$               
930
$                  
Interest expense
992
$                  
1,056
$               
Stock-based compensation
154
$                  
173
$                  
Employee termination and other costs
100
$                  
-
$                   
Loss on sale of asset
477
$                  
-
$                   
Subtract:
Interest and other income
(18)
$                   
(66)
$                   
Gain on sale of asset
-
$                   
1
$                       
Gain on debt extinguishment
-
$                   
(439)
$                 
Adjusted EBITDA
2,186
$               
(526)
$                 
Three Months Ended
September 30,


AVANTAIR
(OTCBB: AAIR)